Will I see a total financial meltdown in my lifetime?
Discussion
I am 37 years old and have witnessed a 'small' financial crisis in 2008.
So, say within the next 50 years, is there a strong possibility of a total global financial meltdown?
This is something that is more frequently talked about as the realisation that the banking system is one that will continue to create much more debt than currency.
As the years tick by, the growing amount of debt will likely get to a point that there is not enough currency to even service the interest repayments.
But it is likely that the financial systems around the world would fall many years before that point. Which may or may not bring that point in time to be within my life time.
As each government that is elected simply kicks the can down the road, there doesn't seem to be much hope.
But is there any alternative to the current system of fractional reserve lending and the creation of money from nothing, which at the same time creates much more debt?
Are we likely to see an end to FIAT currency and a return to a controlled finite resource method of money?
Or is the future simply crypto-currency....with resources carefully controlled via global computing power?
Will Bitcoin save our bacon - or are we already past the point of return?
So, say within the next 50 years, is there a strong possibility of a total global financial meltdown?
This is something that is more frequently talked about as the realisation that the banking system is one that will continue to create much more debt than currency.
As the years tick by, the growing amount of debt will likely get to a point that there is not enough currency to even service the interest repayments.
But it is likely that the financial systems around the world would fall many years before that point. Which may or may not bring that point in time to be within my life time.
As each government that is elected simply kicks the can down the road, there doesn't seem to be much hope.
But is there any alternative to the current system of fractional reserve lending and the creation of money from nothing, which at the same time creates much more debt?
Are we likely to see an end to FIAT currency and a return to a controlled finite resource method of money?
Or is the future simply crypto-currency....with resources carefully controlled via global computing power?
Will Bitcoin save our bacon - or are we already past the point of return?
egomeister said:
Murph7355 said:
Bitcoin is fundamentally no different to the gold standard or other systems that have been tried.
That's not really true. In the gold standard currency value was fixed to gold whereas bitcoin floats.Fiat currency can inflate ad infinitum.
Something is going to have to change.
The population is around 7.5 billion and will be 9 billion in a couple of generations.
There are not now, and there never will be 5 billion jobs to keep that population in gainful happy employment. To avoid wide scale rioting we will have to share the resources (ie money) more fairly amongst all of us.
Add to this the sense of geographical discrimination a large number of people are increasingly feeling. And the ability of multi-national companies to basically take the piss out of the idea of paying a fair share of tax wherever they can.
Unsustainable pensions for a generation that should be dead by now, retirement ages being pushed up.
A company can make a vast profit and do badly because the vast profit isn't as obscene as the vast profit last year.
The population is around 7.5 billion and will be 9 billion in a couple of generations.
There are not now, and there never will be 5 billion jobs to keep that population in gainful happy employment. To avoid wide scale rioting we will have to share the resources (ie money) more fairly amongst all of us.
Add to this the sense of geographical discrimination a large number of people are increasingly feeling. And the ability of multi-national companies to basically take the piss out of the idea of paying a fair share of tax wherever they can.
Unsustainable pensions for a generation that should be dead by now, retirement ages being pushed up.
A company can make a vast profit and do badly because the vast profit isn't as obscene as the vast profit last year.
Voldemort said:
Something is going to have to change.
The population is around 7.5 billion and will be 9 billion in a couple of generations.
There are not now, and there never will be 5 billion jobs to keep that population in gainful happy employment. To avoid wide scale rioting we will have to share the resources (ie money) more fairly amongst all of us.
Add to this the sense of geographical discrimination a large number of people are increasingly feeling. And the ability of multi-national companies to basically take the piss out of the idea of paying a fair share of tax wherever they can.
Unsustainable pensions for a generation that should be dead by now, retirement ages being pushed up.
A company can make a vast profit and do badly because the vast profit isn't as obscene as the vast profit last year.
But all of that, although an important morality point, is irrelevant to the problem of the way that debt is created by the method of fractional reserve lending system of banking.The population is around 7.5 billion and will be 9 billion in a couple of generations.
There are not now, and there never will be 5 billion jobs to keep that population in gainful happy employment. To avoid wide scale rioting we will have to share the resources (ie money) more fairly amongst all of us.
Add to this the sense of geographical discrimination a large number of people are increasingly feeling. And the ability of multi-national companies to basically take the piss out of the idea of paying a fair share of tax wherever they can.
Unsustainable pensions for a generation that should be dead by now, retirement ages being pushed up.
A company can make a vast profit and do badly because the vast profit isn't as obscene as the vast profit last year.
The root problem is that each time you put say £100 in to the bank......if they operate on a 10% fractional reserve, they can lend out 90% of your money, only keeping 10% in the bank's own account.
So now there is £190 in existence, the additional £90 is basically created out of thin air, but more importantly that £90 is also a debt which carries an interest repayment.
The loaned £90 can enter another bank, which can then lend out 90% of it, again creating money from nothing which turns in to a debt, that again has interest repayments on it..... and so on and so on.
So the original £100 will generate a silly amount of currency from nothing, with a silly amount of debt (of which the total debt includes the interest repayments).
Multiply this on a global scale and what we are left with is a system that creates a monumental amount of un-repayable debt, and a currency that is constantly being devalued.
The amount of debt being created will always be MUCH more than the total currency available.
When the point that it is realised the interest repayments are not going to be met, the global financial system will likely crash.
king quickly!Atomic12C said:
But all of that, although an important morality point, is irrelevant to the problem of the way that debt is created by the method of fractional reserve lending system of banking.
The root problem is that each time you put say £100 in to the bank......if they operate on a 10% fractional reserve, they can lend out 90% of your money, only keeping 10% in the bank's own account.
So now there is £190 in existence, the additional £90 is basically created out of thin air, but more importantly that £90 is also a debt which carries an interest repayment.
The loaned £90 can enter another bank, which can then lend out 90% of it, again creating money from nothing which turns in to a debt, that again has interest repayments on it..... and so on and so on.
So the original £100 will generate a silly amount of currency from nothing, with a silly amount of debt (of which the total debt includes the interest repayments).
Multiply this on a global scale and what we are left with is a system that creates a monumental amount of un-repayable debt, and a currency that is constantly being devalued.
The amount of debt being created will always be MUCH more than the total currency available.
When the point that it is realised the interest repayments are not going to be met, the global financial system will likely crash.
So what do suggest as an alternative to fractional reserve banking? No loans at all?The root problem is that each time you put say £100 in to the bank......if they operate on a 10% fractional reserve, they can lend out 90% of your money, only keeping 10% in the bank's own account.
So now there is £190 in existence, the additional £90 is basically created out of thin air, but more importantly that £90 is also a debt which carries an interest repayment.
The loaned £90 can enter another bank, which can then lend out 90% of it, again creating money from nothing which turns in to a debt, that again has interest repayments on it..... and so on and so on.
So the original £100 will generate a silly amount of currency from nothing, with a silly amount of debt (of which the total debt includes the interest repayments).
Multiply this on a global scale and what we are left with is a system that creates a monumental amount of un-repayable debt, and a currency that is constantly being devalued.
The amount of debt being created will always be MUCH more than the total currency available.
When the point that it is realised the interest repayments are not going to be met, the global financial system will likely crash.
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